The Mediterranean yacht rate structure in a contract to charter a boat is as follows. First, there is a fixed base rate for the boat and the crew. Second, there is a “variable” part which is called the APA (Advance Provisioning Allowance).
This is, essentially, an “advance” that you are making to the Captain of the vessel to cover expenses that are unknown at this point. For example the fuel, and yes, sailing vessels actually use fuel too, for the generators and main engines if used – fuel is dependent on the itinerary and the itinerary is unknown at this point because you, as the charterer of the vessel can legally ask the captain to visit different places and ports when you are on board, also the weather can change and if you have the wind against you the vessel may consume more fuel than if you were running down-wind.
Food and Beverages are also unknowns since at this stage, we still do not know your taste in food or drink. Port fees, cruising taxes (if any) and docking charges in marinas are different and change depending on the location.
All of these items are collectively grouped into this “variable” part of the rate that is covered by the APA. Now, to make things easier for the charterer (you) we, as booking agents, tend to assign a percentage of the base rate to cover the APA. In the case of Greece, for example, we tend to give you an approximate figure that ranges from 25% to 30% of the base rate for sailing vessels and 30% – 35% of the base rate for motor yachts.
So, as an example, if your base charter rate is E5,000 a day, and we assign 30% extra so it becomes E5,000 + E1,500 for the APA, or E6,500 a day plus VAT (European Value Added Tax) on the base rate. The European VAT can change depending on the flag of the vessel and the port of departure and the certification of the vessel. There have been some discussion recently in various EU governments about the taxation of domestic and foreign yachts, so the VAT is and will continue to be, a moving target.
At the end of your charter, the captain will reconcile the actual expenditures vs. the APA with actual receipts, so you know where the money has gone and he will give you periodic updates as to where you stand with the APA.
If you are owing the captain money at the end of the charter you will be expected to top it up with a credit card, if he has spent less than the APA, you will get money back. Please remember that tips in the Med are discretionary but customary.
5% to 7% of the base charter rate is a good rule of thumb, depending on service, of course. The gratuity should be given to the captain so he can distribute it to the other crew members.
All this sounds a little complicated but it has developed naturally over the years as a protection for the client as well as the ship-owner. All inclusive packages sound great but you’ll usually be over-paying for something. The “plus- expenses” system protects you because you only pay for what is actually spent.
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